Seller financing wrap around

[Jesse Wolf]

Ok, I believe I've found myself in a pretty amazing situation to acquire a duplex. A family friend is selling after 25 years of being a landlord, and she just wants to be done with it and move onto the next chapter in her life.

She is open to seller financing and working with me, so I am trying to figure out the best way that I can get into it without any money out of pocket. She does not need any money right now, and actually seemed like she would prefer the monthly installment payments especially if it gave her a tax benefit. To my understanding, the installments would still be taxed on capital gain for the total price of the sale, which would be at 15%.

The kicker is that she still owes a 90k mortgage on it. I am concerned about the due on sale clause. From what I've read so far, it doesn't sound like the bank would call it due as long as I make the payments on time(I'm not concerned about being able to make the payments). Also in a worst case scenario I do have access to the 90k and would be able to pay it back, however for obvious reasons I'd like to keep my cash free.

The duplex itself is valued at about 400k (we live in WA state). What is the way that I would be able to seller finance this and be able to get into it without any money out of pocket? 

I'm scouring the internet, youtube, talking to friends but I figured I'd throw up a post too and see if anyone would be willing to walk a young hustler first timer through the process.

Ideas I've lightly thought about, but I'm not sure if these are possible/legal:

-Take traditional mortgage for 90k, do a personal note for the remainder 

-Take full personal secured note for the purchase price, and pay the 90k mortgage myself

-Pay off her mortgage, take ownership, then put a bank mortgage on it and pull my cash back out, and then write a note for the remainder

Thanks BP!